Declines in spending on residential construction are often due to increases in interest
rates. The collapse in residential construction prior to and during the recession of
2007-2009 was due more to ________ than to higher interest rates.
A) the financial crisis that began in 2007
B) the rapid inflation of the early 2000s
C) increases in the price of lumber
D) rising wages in the construction industry
Jennifer Borts moves her office from the premises she rents at a local mall to her home.
As a result of this move
A) Jennifer’s explicit costs fall and her implicit costs rise.
B) Jennifer’s total costs fall.
C) Jennifer’s implicit costs fall.
D) Jennifer’s opportunity costs fall.
The minimum amount that investors must earn on the funds they invest in a firm,
expressed as a percentage of the amount invested, is referred to as
A) the explicit costs of production.
B) net worth.
C) net income.
D) a normal rate of return.
Which of the following statements is true?
A) Whenever a firm raises its price its total revenue will increase.
B) When a firm lowers its price its total revenue may either increase or decrease.
C) Whenever a firm increases its quantity sold its revenue will increase.
D) Total revenue will equal zero when the demand for a product is unit-elastic.
________ sell shares to investors and use the money to buy short-term securities.
A) Mortgage-backed securities dealers
B) Hedge funds
C) Money market mutual funds
D) Shadow banks
One difference between the labor market and markets for goods and services is
A) the demand in the labor market is inelastic; the demand for goods and services may
be elastic or inelastic.
B) the supply of labor is perfectly inelastic because the quantity supplied is constant.
The elasticity of supply for goods and services is different in different markets.
C) concepts of fairness arise more frequently in labor markets than in the markets for
goods and services.
D) in the labor market, firms are suppliers while households are demanders.
Figure 16-6
Watanabe Sensei operates the only
martial arts school in Hartfield. For simplicity, assume that consumers have identical
demand curves and that Sensei knows what this demand curve is. Figure 16-6 shows
this demand curve. If Sensei acts as a monopolist and charges the profit-maximizing
price, what is his producer surplus?
A) the area B + D + G
B) the area A + B + C + D + H + G
C) the area C + D + H + G
D) the area A + C + H
If production displays increasing marginal returns, then
A) total product rises by a constant amount throughout.
B) each new worker hired adds more to output than previous hires.
C) the firm must be adding new capital to keep boosting productivity.
D) total product reaches a maximum sooner than if production displayed decreasing
returns.
Figure 9-2
Suppose the U.S. government
imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the impact of this
tariff. As a result of the tariff, domestic producers increase their quantity supplied by
A) 31 million pounds of rice.
B) 22 million pounds of rice.
C) 15 million pounds or rice.
D) 6 million pounds of rice.
If the number of unemployed workers is 19 million, the number in the working-age
population is 500 million, and the unemployment rate is 4%, what is the labor force
participation rate?
A) 4.75%
B) 7.8%
C) 95%
D) 96.2%
A bond is a financial security that represents
A) ownership in a corporation.
B) the portion of profits paid to shareholders.
C) the interest rate paid on a share of stock.
D) a promise to repay a fixed amount of funds.
According to ________, entrepreneurship does not contribute anything of value to
production.
A) Robert Lucas and Thomas Sargent
B) Milton Friedman
C) John Maynard Keynes
D) Karl Marx
One of the most widely followed stock indexes in the United States is the Dow Jones
Industrial Average. This index represents
A) the stock prices of 500 large U.S. firms.
B) an over-the-counter market.
C) the stock prices of more than 4,000 U.S. firms.
D) the stock prices of 30 large U.S. corporations.
An advantage of the establishment survey over the household survey of the labor
market is that the establishment survey
A) is based on actual payrolls, rather than on unverified answers.
B) includes the number of self-employed persons.
C) includes persons employed at newly opened firms.
D) provides an estimate of the number of persons unemployed.
Congressman Flack votes for a program that will benefit the constituents of
Congressman Walpole. Which of the following explanations for Flack’s vote is most
consistent with the public choice model?
A) Congressman Flack did not have time to read and understand all of the legislation he
voted on. Members of Congress often depend on their staffs to read proposed legislation
and recommend how they should vote.
B) Legislators such as Congressman Flack are similar to other decision-makers in that
they sometimes make irrational choices.
C) Congressman Flack will support programs of legislators from his own party,
regardless of who benefits from these programs.
D) Congressman Flack expects Congressman Walpole’s support for programs that will
benefit Flack’s constituents.
The processes used to produce goods and services describes
A) innovation.
B) entrepreneurship.
C) technology.
D) capital.
The basic aggregate demand and aggregate supply curve model helps explain ________
fluctuations in real GDP and the price level.
A) short-term
B) long-term
C) both short-term and long-term
D) unrelated
According to the “rational expectations” school of thought in macroeconomics, the
short-run Phillips curve is ________ in face of unanticipated changes in monetary
policy.
A) negatively sloped
B) positively sloped
C) vertical
D) horizontal